UniFirst Corp. (NYSE:UNF) Q1 2020 Earnings Conference Call - Final Transcript

Jan 08, 2020 • 09:00 am ET

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UniFirst Corp. (NYSE:UNF) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings, and welcome to the First Quarter Earnings Call. [Operator Instructions] Afterwards we will conduct a question-and-answer session. [Operator Instructions]

I would now like to turn the conference over to Mr. Steven Sintros, UniFirst's President and Chief Executive Officer. Please go ahead, sir.

Executive
Steven S. Sintros

Thank you, and good morning. I'm Steven Sintros, UniFirst's President and Chief Executive Officer. Joining me today is Shane O'Connor, Senior Vice President and Chief Financial Officer. We'd like to welcome you to UniFirst Corporation's conference call to review our first quarter results for fiscal year 2020 and to discuss our expectations going forward. This call will be on a listen-only mode until we complete our prepared remarks, but first a brief disclaimer.

This conference call may contain forward-looking statements that reflect the company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties. The words anticipate, optimistic, believe, estimate, expect, intend and similar expressions that indicate future events and trends identify forward-looking statements. Actual future results may differ materially from those anticipated depending on a variety of risk factors. For more information, please refer to the discussion of these risk factors in our most recent 10-K filing with the Securities and Exchange Commission.

I'm happy to report that UniFirst's first quarter of fiscal year 2020 produced solid results for the Company relative to both our top and bottom line. Shane will go into the details shortly, but I wanted to first take a moment to step back and recap the quarter's results.

For the first quarter of 2020 UniFirst set record highs for both revenues and profits. Consolidated first quarter revenues were $465.4 million, an increase of 6.1% over the same quarter a year ago. Meanwhile, operating income and net income were $60.1 million and $48.2 million respectively, representing increases of 19.2% and 25.9%, when compared to the first quarter of last year.

As always, I'd like to acknowledge that we do not achieve our Company's successes alone. That said, I want to take this opportunity to thank those who are so critical to UniFirst day-to-day accomplishments. Our 14,000 plus employee team partners throughout North and Central America and in Europe, who work so hard week in and week out to take care of our customers each other and our Company.

Our strong first quarter results were primarily influenced by our core laundry operations, which make up approximately 90% of our overall revenues and operating income. With respect to the primary growth drivers of this segment, the quarterly results were largely positive, but there were some areas of caution to be noted as we look over the remainder of the year.

During the first quarter, new account sales exceeded the strong first quarter sales we achieved in fiscal year 2019. However, December activity combined with future sales projections have our second quarter new sales expectation softening, when compared to the first quarter in prior year's activities. In addition, our additions versus reductions metric, which measures wearer levels